February Gold, Get Ready for $1400

January 4, 2019 8:07AM CST

The gold market continues to catch a bid from a plethora of outside bullish news. In short, you have extreme volatility in the U.S. equity markets, weak manufacturing data out of China, and a much weaker U.S. dollar that continues to look toppy. This morning, the U.S. non-farm payroll number showed a blowout 312,000 jobs created vs 176,000 created and the Dow is currently up around 300. Even if U.S. equities do march higher, it’s likely that gold will be unphased on its move higher as market sentiment in general shows a clear “risk off” mentality.

From a technical perspective, February gold did in fact move up past 1300 this morning as it hit a high of 1300.4. The next major area of gold’s willingness to move higher is around 1325. This is where we spent about a month back in the May/June time frame. The trend is still clearly up, and always remember “overbought” and “oversold” mean nothing, as markets can remain in both for months, even years at a time. Just because gold has rallied $100 since mid-November doesn’t mean it can’t go right through 1300 all the way to 1400. In my opinion, it’s likely to have a little more chop on the march to that level, but the biggest push from a macro-economic perspective is going to be U.S. tariffs biting the Chinese economy and slowing their economic growth which in turn stokes a push into safe havens such as gold.

Gold Feb '19 Daily Chart

Gold Feb '19 Daily Chart

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.